News Story

Mystery Project Almost Got $5.5 Million From Taxpayers

Funding for P20 project tied up with money losing real estate offering, corporate welfare

The pyramid-shaped Steelcase Corporate Development Center was going to become the P20 Project.

Few details are known about the P20 Pyramid project slated for Kent County, yet all but two Senate Republicans voted for it twice and it nearly received $5.5 million in funding from the state.

Sen. Mark Jansen, R-Gaines Township, pushed for the funding, but has been silent about his efforts. Most recently, Gov. Rick Snyder walked away from the idea of giving the project taxpayer money.

Described as a "public/private partnership, Pyramid P20 education hub," the project was promoted as a way to increase the number of students in Michigan who would be proficient in high-tech STEM (science, technology, engineering and math) subjects. It was to be located in the Gaines Township portion of Grand Rapids.

Steelcase, the West Michigan furniture company, was going to donate its landmark pyramid building to the project. P20 is an integrated education system that extends from pre-school through higher education.

That was about all of the information available regarding the project in its listing as a line item in Senate Bill 608, a supplemental spending bill that made roughly a quarter of billion dollars in adjustments to Michigan's current fiscal year budget. When Gov. Snyder signed the bill on March 18, the P20 Pyramid project was still part of it, but the $5.5 million had been stripped out.

That was because a legislative conference committee had opted not to immediately approve the funding for the project, but agreed to keep the possibility of potential funding for it alive with a $100 "placeholder" appropriation. That decision came on March 12. Two days later it was reported that Sen. Jansen was listed as an "organizer" on an application to get Lake Superior State University to authorize a K-8 charter public school in Grand Rapids at the proposed site of the project.

"What seems bizarre is the apparent secrecy surrounding the proposal," said Jack McHugh, senior legislative analyst for the Mackinac Center for Public Policy. "In particular, who will become the proud new owner of a building used for the project for which taxpayers would have paid $5.5 million? Why no names? One red flag: The money would come from the state agency in charge of granting special subsidies to particular corporations and developers.

"Another warning sign is the failure during the process to communicate any value the entity would add to a school system that already spends tens of millions on intermediate management layers, robotics programs, math and science centers, and other arguably non-essential programs," McHugh said. "One suspects that most Senators who voted for this project don't know much more than the rest of us. The conference committee may have done their colleagues a big favor by balking."

Within Senate Bill 608, the project and the $5.5 million in proposed funding was categorized under the heading of Strategic Fund, which is an arm of the Michigan Economic Development Corp., the state's corporate welfare arm.

Beginning on Feb. 22, nearly three weeks before the conference committee's decision, Michigan Capitol Confidential attempted the get details about the project. Virtually no one in the Legislature or among those who represent educational interests at the Capitol was willing to talk about it on the record.

Sen. Jansen has repeatedly declined to return phone calls offering him the chance to comment on the project. However, he and other backers of the P20 project have told Grand Rapids reporters that his name appearing on the application was the result of a mistake.

Rep. Fred Durhal, D-Detroit, the ranking Democrat on the House Appropriations General Government Subcommittee, said he would be interested to see what would happen if the backers of the P20 Pyramid project continue to pursue funding for it in the Legislature.

"I think it's interesting that this project came so close to making it through the process and getting $5.5 million from the state," Rep. Durhal said. "There are so many details about this that the Legislature apparently knows nothing about. If the project were to come before the House Appropriation Committee, I'd like to find out who or what would end up owning the Pyramid building. I'd also like to know if this project offers anything new that isn't already available from ISDs or school districts.

"Overall, I don't even know for sure whether or not it is clear exactly what the $5.5 million would have been used for," Rep. Durhal said. "I also wonder if other projects about which we have as little information as this one have received public dollars in recent years."

The Pyramid building could be considered a real estate "white elephant." Steelcase received Michigan Economic Growth Authority credits for it in the past, along with local tax abatements. Steelcase spent $111 million on its construction in 1989. In 2012, it was put on the market for $19.5 million.

Citing Sen. Jensen's reported ties to the project, Michigan Democratic Party Chairman Lon Johnson publicly criticized Senate Republicans for trying to secure the $5.5 million for the project.

On Sunday, March 30, Gov. Rick Snyder told reporters in Grand Rapids that he doesn't support allocating state money for the project.

Jerry Zandstra, a politically well-connected West Michigan reverend, who has attempted to run for U.S. Senate and chairman of the Michigan Republican Party in the past, has been the front man for the P20 project. Zandstra is co-founder of Inno-Versity, an eLearning company that provides training and instructional materials. Zandstra has not responded to phone calls for comment.

Not only did a majority of Senate Republicans vote for the legislation that included the funding for the project, all but two of them, Sen. Patrick Colbeck, R-Canton, and Sen. John Moolenaar, R-Midland, voted against an amendment offered by the Democrats on Feb. 20 to take it out of the final bill.


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CapCon Coverage of the MEDC